India’s semiconductor sector is rapidly evolving in 2025. While foundries, packaging, and design-linked incentives gain attention, the core of technological sovereignty lies in semiconductor equipment manufacturing. This involves machines that etch, deposit, polish and test chips. India aims to move from technology consumer to co-creator by developing these tools. The global US-China chip rivalry and friendshoring trends offer India a unique chance to become a trusted equipment partner. However, mastering semiconductor equipment demands long-term investment in advanced fields like plasma physics and robotics.
Current Semiconductor Landscape in India
India has launched initiatives such as the India Semiconductor Mission (ISM) and Design Linked Incentive (DLI) scheme. Major projects like Tata-PSMC’s logic fab and Micron’s ATMP facility in Gujarat will create domestic demand for machine tools. India’s solar photovoltaic (PV) industry growth complements semiconductor manufacturing. Both industries share common processes like crystal growth and wafering, enabling shared manufacturing platforms. This synergy can accelerate machine tool development.
Three-Stage Roadmap for Equipment Self-Reliance
India’s goal is to reach 70% self-reliance in packaging tools, 60% in PV and power-semiconductor equipment, and 30% in mature-logic tools within 15 years. – Stage One (0-3 years) – Focus on assembly, test, marking and packaging (ATMP) tools and PV manufacturing equipment. Existing precision engineering skills in vacuum systems and plasma power can be leveraged. CSIR labs, SAMEER and SSPL possess critical knowledge but need industry partnerships for production-grade tools. – Stage Two (3-7 years) – Build an integrated supply chain including precision machining and robotics. A National Semiconductor Equipment Mission (NSEM) could coordinate academia, MSMEs and OEMs. International models show that university-industry collaboration reduces time-to-market and improves reliability. – Stage Three (7-12+ years) – Advance research in wide-bandgap semiconductors and compound materials. Collaborations between IITs, SAMEER and SSPL can link defence and civilian technology. Defence R&D will catalyse innovations for commercial semiconductor tools.
Role of Private Sector and Innovation
Despite government schemes, private sector engagement is limited. Indian conglomerates in engineering and capital goods must seize opportunities. Semiconductor toolmaking is not just import substitution but entry into a high-knowledge value chain. India’s strengths in software and manufacturing can enable AI-assisted, energy-efficient tool platforms. Existing expertise in CNC, robotics and control systems can be redirected to plasma etch tools, metrology and wafer handling robotics.
Export Potential and Global Positioning
Indian-made semiconductor tools can serve emerging markets in South-East Asia, Middle East and Africa. These regions need affordable, reliable equipment for electronics and solar manufacturing. Export-credit guarantees and technology diplomacy can enhance India’s role as a trusted partner. Focus on AI-assisted design, predictive maintenance and remote monitoring will give India a competitive edge. Aligning with global SEMI/GEM standards will ensure interoperability and credibility.
Immediate Action Plan
About 10 Indian OEMs should collaborate on Stage-One tools to set common standards and reliability metrics. Pilot projects with Micron-ATMP, Tata-PSMC and PV giga-fabs are essential for 2026–27. Milestone-based funding will reduce risks in early adoption. Persistent execution of this roadmap can build a resilient, innovative semiconductor equipment ecosystem.
Questions for UPSC:
- Discuss in the light of India’s semiconductor ambitions, the significance of developing indigenous manufacturing capabilities in high-technology sectors for strategic autonomy.
- Critically examine the role of public-private partnerships in encouraging innovation ecosystems in emerging technology domains like semiconductor equipment manufacturing.
- Explain the concept of friendshoring and discuss its impact on global supply chains and India’s position in the semiconductor industry.
- With suitable examples, discuss how defence research and development can catalyse civilian technological advancements, especially in high-tech manufacturing sectors.
Answer Hints:
1. Discuss in the light of India’s semiconductor ambitions, the significance of developing indigenous manufacturing capabilities in high-technology sectors for strategic autonomy.
- Indigenous manufacturing reduces dependence on foreign suppliers, enhancing national security and supply chain resilience.
- Semiconductor equipment manufacturing is critical for technological sovereignty, enabling India to move from consumer to co-creator in global tech.
- Developing advanced machine tools requires deep R&D in plasma physics, robotics, optics, and mechatronics, encouraging innovation ecosystems.
- Strategic autonomy in high-tech sectors safeguards against geopolitical risks, such as US-China chip rivalry and export restrictions.
- Self-reliance in semiconductor tools supports the growth of domestic fabs, packaging, and solar PV industries, creating economic and employment benefits.
- Long-term capability building in equipment manufacturing strengthens India’s position in the trillion-dollar semiconductor value chain.
2. Critically examine the role of public-private partnerships in encouraging innovation ecosystems in emerging technology domains like semiconductor equipment manufacturing.
- Public R&D institutions (CSIR, SAMEER, SSPL) provide foundational research and prototypes but need private sector scale-up and commercialization.
- Structured consortia involving academia, MSMEs, and OEMs encourage integrated supply chains and reduce time-to-market (e.g., Japan’s TEL-University model).
- Joint pilot lines and co-funding mechanisms enable sharing of risk, resources, and expertise between public and private sectors.
- Government schemes (ISM, DLI) create demand signals and financial incentives, encouraging private investment and innovation.
- Private sector brings design brilliance, manufacturing expertise, and the ability to develop AI-assisted, energy-efficient tools.
- Challenges include limited current private participation and the need for policy continuity to sustain long-term collaboration.
3. Explain the concept of friendshoring and discuss its impact on global supply chains and India’s position in the semiconductor industry.
- Friendshoring is relocating production to trusted democracies to reduce geopolitical risks and supply chain disruptions.
- US-China chip rivalry has accelerated friendshoring, creating opportunities for countries like India to become trusted partners.
- India can leverage friendshoring to attract investments in semiconductor fabs, packaging, and equipment manufacturing.
- Friendshoring supports diversification of supply chains, enhancing global stability and resilience.
- India’s democratic credentials and growing semiconductor ecosystem position it as a reliable supplier in the global semiconductor value chain.
- Successful friendshoring requires India to develop capabilities in equipment manufacturing and align with global standards (SEMI/GEM).
4. With suitable examples, discuss how defence research and development can catalyse civilian technological advancements, especially in high-tech manufacturing sectors.
- Defence R&D often leads to breakthrough technologies that later find civilian applications (dual-use technology).
- Examples – US defence semiconductor base catalyzed commercial MEMS, lasers, sensors industries.
- In India, institutions like DRDO and SSPL can bridge defence and civilian semiconductor tool development.
- Defence-driven innovation accelerates advanced materials research (wide-bandgap semiconductors like SiC, GaN).
- Defence collaborations provide funding, expertise, and infrastructure critical for high-tech manufacturing innovation.
- Such synergy strengthens strategic autonomy and boosts competitiveness in global high-tech markets.
